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SAP, Apple Tie-Up to Revolutionize Mobile Platforms

Germany-based software developer SAP SE SAP has partnered with Apple Inc. AAPL to develop corporate apps for the latter’s iPhones. This move will likely revolutionize the mobile platform, enhancing the experience for clients. However, the consequential announcement failed to cheer investors as the SAP’s share price remained relatively unchanged at the close of trading on Friday.

Inside the Headlines

Per the partnership, SAP’s commercially successful SAP HANA platform, the predominant money-spinning offering of the company, will be integrated into iPhone and iPad applications to design a superior mobile working platform. Leveraging on the competence of the SAP HANA Cloud Platform, SAP will also create an iOS software development kit (SDK) that will help developers, partners and customers build their own iOS apps for iPhone and iPad.

The companies believe that this partnership will combine their areas of expertise to create an unprecedented secure mobile platform that can deliver live data. For Apple, the new SDK will help it to capitalize from SAP’s base of more than 2.5 million developers, taking the digital platform to the next level. 

Moreover, Apple’s commercially successful secure and interactive programming language, Swift, will be used to develop new applications, compatible with the SAP Fiori for iOS design language, that can provide enhanced user experience. Further, the other exclusive features of iPhone and iPads like Touch ID, Location Services and Notifications will be used for the applications. Also, SAP intends to open a new SAP Academy for iOS to offer necessary training for ecosystem partners to make full use of SDK and Apple’s innovative hardware and software.

Our Take

SAP is steadily emerging as a frontrunner in the enterprise software business and the recent deal is expected to widen the company’s customer base. The company has established dominance over three of the most critical client demand areas, namely, efficient customer engagement, human capital management and interconnected commerce network, which in turn, is expected to fuel growth.

SAP follows an open ecosystem strategy, which enables it to better leverage its innovation capacity by extending it to partners as well. This drives better customer value, based on respective domain expertise. Of late, the company has been primarily concentrating on expanding its cloud business to become one of the leading players in the category. Further, it has gained a competitive edge over its cloud competitors as its processes are designed to be industry-specific and can be customized to meet corresponding business requirements.

SAP currently holds a Zacks Rank #2 (Buy). Other favorably ranked stocks in the same space are Avid Technology, Inc. AVID and CommVault Systems, Inc. CVLT. Both the stocks sport a Zacks Rank #1 (Strong Buy).

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APPLE INC (AAPL): Free Stock Analysis Report
 
AVID TECH INC (AVID): Free Stock Analysis Report
 
COMMVAULT SYSTM (CVLT): Free Stock Analysis Report
 
SAP AG ADR (SAP): Free Stock Analysis Report
 
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